The present invention relates generally to financial transaction sytems, and in particular, to a multi-faceted financial transaction system for use by retail establishments.
Irrespective of size, retail establishments must take into account of a variety of financial considerations in their day-to-day operations. Apart from the requirements of maintaining an appropriate inventory, and appropriate cash management, more often than not a retailer is required to accept payment for goods sold or services rendered by means of credit card or other non-cash transaction devices. This may include the acceptance of institutionalized credit cards, such as are provided through credit card services including "Visa", "Mastercard", "American Express", "Diner's Choice", and so on. For larger retail establishments, this may even include the acceptance of so-called "private label" credit cards which are distributed by the retail establishment for use by its customers. As another consideration, it is not uncommon for retail establishments to accept personal checks in payment for goods and services.
In accepting any or all of these forms of alternative payment, it is important that a retail establishment be assured that the line of credit extended in connection with the credit card offered is sufficient to cover the charge incurred and that the customer is current in payments made to the credit card service, or that the customer's checking account is sufficient to warrant acceptance of a personal check. For this reason, a variety of services have been established which enable a retailer to verify the validity of a credit transaction. Particularly in the case of credit cards, this may include the circulation of pamphlets or other listings indicating the number of credit cards which are not to be honored for various reasons, including poor credit risk and theft. However, such listings are generally cumbersome in use, and exhibit an inherent time lag between distribution of the pamphlets and their actual use which can result in the posting of a charge to an account which should not properly have been honored. Also to be considered is that such systems are not readily applicable to the verification of personal checks.
As a result, a variety of automated systems have been developed which enable a retail merchant to communicate with the company issuing the credit card, or a company which will guaranty the personal check, to obtain an immediate indication as to whether or not the credit card/check should be accepted or rejected. Such systems may take the form of a clearing house which can be contacted by telephone to provide a credit card/check number for verification against listings maintained at the clearing house. More recently, such voice communications have been replaced with automated systems which enable magnetic markings provided on the credit card/check to be read automatically, and which automatically access a data base for interrogation as to whether or not the credit card/check may be accepted.
While reducing the need for human intervention in the verification of credit transactions to the extent possible, and improving reliability by decreasing delays between compilation of a listing of unacceptable numbers and accessing of the compiled listing, such systems are still subject to a number of drawbacks.
For example, many times it is necessary to have available a different remote terminal for accessing each of the several data bases which are available for credit verification. This may include separate terminals capable of accessing the various institutionalized credit card systems available, a separate terminal for accessing a private label credit card system, and a separate terminal for accessing a check guarantee system. This is clearly duplicative in cost, presenting the merchant with a significant capital expenditure which may not be justified in relation to the volume of business handled by such means of alternative payment.
It will further be noted that such systems make no accommodations for other improvements in cash management which have recently come into existence.
One such consideration relates to the availability of debit cards, which would allow the retail merchant to obtain direct payment for goods or services from the customer's bank account by means of an automated clearing house system. Although several such debit card systems have been made available for use by various institutions, as well as some larger retailers, available credit verification systems do not accommodate such functions, requiring that yet another terminal be kept on hand to provide such a feature.
Another consideration is that such credit verification systems in no way assist the retailer in accelerating payment for the goods sold or services rendered. To obtain payment, the retail merchant is constrained to await processing of the credit transaction slips which are used to memorialize the various transactions entered into in the course of a business day, leading to delays in payment which can be as much as two weeks in duration. It will be understood that such a line of credit represents a significant cost in operation. The primary reason for this delay is that existing credit verification systems are dependent upon verification of the many transaction slips produced in the course of operations, since such slips represent the only record of the transactions entered into. Thus, ultimate payment is subject to delays inherent in hand sorting and tallying the slips, and in forwarding the tallied slips to the credit agency for eventual verification and processing.
Another consideration is that such credit verification systems merely serve to verify the validity of a transaction and in no way assist in recording the transaction, or settling recorded transactions against the merchant's records. Thus, before assembling slips for eventual payment as previously described, the retail merchant must first collect and resolve the various transactions entered into by hand, with no assistance in the location of erroneous entries which prevent balancing and settlement.
It has therefore remained desirable to develop a financial transaction system which is capable of handling the various credit/debit/checking instruments which are used in connection with current credit transactions by means of a single communicating terminal, and which is also capable of recording such credit transactions for expediting resolution and settlement of the transactions entered into as well as accelerating payment for such transactions by the various credit agencies subscribed to.